ISCR Case 15-05478.h1

Case Headnote

ISCR Case No. 15-05478.h1

grantedJun 5, 2017· Hon. Robert Robinson Gales· hearing

Summary

A 54-year-old financial planner for a defense contractor was granted a security clearance despite concerns under Guideline F (Financial Considerations). The Statement of Reasons (SOR) cited several financial issues. Specifically, the applicant owed $98,166 in federal income taxes, leading to an IRS tax lien in February 2015, as he had not filed returns or had sufficient funds withheld. Additionally, a department store account with a $166 balance was placed for collection in 2014, though the applicant claimed it was resolved years prior and no longer appeared on his credit report. An automobile loan with a $27,722 unpaid balance and a $651 past due amount was also placed for collection in 2015, which the applicant attributed to insurance payment delays following a May 2015 accident.

Disqualifying conditions under Guideline F were raised, but mitigating conditions were applied. The judge determined that the applicant's financial difficulties were largely beyond his control, stemming from the 2008 real estate market collapse.

The applicant demonstrated a good-faith effort to resolve his debts, including establishing an installment agreement with the IRS for his unpaid taxes. He also showed a history of resolving delinquent accounts and improving his financial situation before the SOR was issued. Based on these factors, the security clearance was granted.

Why the Applicant Prevailed

The applicant established a good-faith effort to resolve his financial issues, including an installment agreement with the IRS.
The financial difficulties were largely attributed to circumstances beyond the applicant's control, such as the real estate market collapse.
The applicant demonstrated a history of resolving delinquent accounts and improving his financial situation prior to the SOR.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations
AG ¶ 19(g)raisedFailure to File Annual Federal, State, or Local Income Tax Returns

Mitigating

AG ¶ 20(a)appliedBehavior Happened Long Ago or Infrequently
AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
AG ¶ 20(c)appliedEvidence of Counseling or Resolution of Problems
AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue Creditors

Key Rule Quoted

“Clearance decisions are aimed at evaluating an applicant’s judgment, reliability, and trustworthiness. They are not a debt-collection procedure.”

Procedural Posture

SOR issuedMay 16, 2016
Answer filedJun 24, 2016Applicant elected to have the case decided on the written record.
Hearing held—No hearing; case decided on the written record.
Decision dateJun 5, 2017

Cite For

Good-faith Efforts to Resolve Financial Issues Under Guideline F
Mitigation of Financial Concerns Due to Circumstances Beyond the Applicant's Control
Evaluation of Judgment and Reliability in Security Clearance Decisions.

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant did not have any federal or state income taxes withheld, and because he had insufficient funds available to pay his income taxes, he did not file his federal or state income tax returns. The Internal Revenue Service (IRS) calculated his unpaid federal income taxes for the period and determined that Applicant owed $98,166. In February 2015, the IRS filed a tax lien for that amount. $98,166	For Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations (g) unexplained affluence	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Other
1.b	There is a department store charge account with an unpaid balance of $166 that was placed for collection in 2014. In his Answer to the SOR, Applicant acknowledged that he did have a balance over eight years ago, but contended that the account was resolved 'several years ago.' He claims he obtained a credit report and there is no balance appearing in it. $166	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	Claimed Other
1.c	specific text not stated in this decision	Against Applicant	Unspecified Financial	Denied	—	—	—
1.d	There is an automobile loan with a high credit of $34,430, past due balance of $651, and unpaid balance of $27,722 that was placed for collection in 2015. In his Answer to the SOR, Applicant indicated that he was involved in an automobile accident in May 2015, and that delays in insurance payments caused a delay in paying on the account before it became delinquent. $27,722	For Applicant	Auto Loan Debt	Denied	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant did not have any federal or state income taxes withheld, and because he had insufficient funds available to pay his income taxes, he did not file his federal or state income tax returns. The Internal Revenue Service (IRS) calculated his unpaid federal income taxes for the period and determined that Applicant owed $98,166. In February 2015, the IRS filed a tax lien for that amount.

$98,166

For Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(g) unexplained affluence

(b) conditions largely beyond the person’s control; acted responsibly

(c) received/receiving counseling; problem being resolved

(d) good-faith effort to repay or otherwise resolve debts

Claimed

Other

1.b

There is a department store charge account with an unpaid balance of $166 that was placed for collection in 2014. In his Answer to the SOR, Applicant acknowledged that he did have a balance over eight years ago, but contended that the account was resolved 'several years ago.' He claims he obtained a credit report and there is no balance appearing in it.

$166

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

Claimed

Other

1.c

specific text not stated in this decision

Against Applicant

Unspecified Financial

Denied

—

1.d

There is an automobile loan with a high credit of $34,430, past due balance of $651, and unpaid balance of $27,722 that was placed for collection in 2015. In his Answer to the SOR, Applicant indicated that he was involved in an automobile accident in May 2015, and that delays in insurance payments caused a delay in paying on the account before it became delinquent.

$27,722

For Applicant

Auto Loan Debt

Denied

—

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Case Profile

Summary

Why the Applicant Prevailed

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES